Why is Customer Engagement Important and How to Improve it?

What are engaged customers, and why is it important to focus on customer engagement? Many years ago, having a good product could lead to happy and engaged customers. But today data that shows that engagement and the activities that lead to it are important elements when customers decide which service or product they will choose. Customer engagement is a fluffy concept to many.
Let's have a look at what it means, why it is important, and how you can improve it.

What is Customer Engagement?

Customer engagement is more than just the transactional relationship between a customer and a company. It is affected by all interactions between your brand and the customer – from quick looks at your marketing initiatives to the reactions to your customer service. The goal of working with customer engagement is to grow relationships with your customers.

A brand that engages with its customers has a consistent approach and provides value to the customers' different points of interaction, which increases loyalty.

Customer engagement is sometimes confused with, e.g., customer experience. There are overlaps between the two concepts, but let's have a look at how they are different.

Customer Engagement vs. Customer Experience (CX)

Customer experience (CX) describes the impression your customers have of your brand and business. It combines all the aspects of your business that your customers encounter and the experience they have when connecting with your company. When working with CX you should try to see your business from your customers' points of view and improve the whole experience.

Customer engagement makes the customer an active part of the relationship. This means that you should explore your customers' reactions and how they engage with your marketing efforts, sales representatives and customer service. And you should have a dialogue with them and consider how they speak (or write) to and about your company.

The Benefits of Customer Engagement

Recommendations from friends, family, colleagues, etc., are important in the last stage of a decision process. Engaged customers are more likely to recommend your business. Our studies show that half of the delighted customers are true ambassadors that actively recommend the company to others.

So, what are the actual benefits of focusing on and increasing customer engagement? It will boost your acquisition of new customers.

Another important benefit of a high level of customer engagement is that is easier to sell more products or services to an existing customer than to sell to a new customer. The likelihood of selling to an existing customer is 60–70% while it is only 5–20% for new prospects. Upselling saves time and money and will benefit your bottom line.

The experience customers have with your brand is more important than ever. You cannot just rely on having a great product. You also need to give them appealing marketing campaigns, a customer-centric experience with sales, and excellent customer service.

Activities That Improve Customer Engagement

A customer engagement strategy is a strategy a brand or business develops for what to, how to, where to, and when to engage its customers. Usually, the strategy includes focus areas like customer touch point engagement, product engagement, brand engagement, and agent engagement. But what activities can you implement to improve customer engagement?

We've listed six examples of activities that improve customer engagement:

1. Make personalized interactions

2. Offer thought-leading and helpful content

3. Collect feedback and address it

4. Take a social approach

5. Use live chat to answer questions and help customers IMMEDIATELY

6. Reward engaged customers

Which customer engagement activities you should implement depends on your business. But these six activities will fit into most companies' customer engagement strategies.